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Business looking in the wrong place for productivity improvement
It’s now 22 years since the Karpin Report – Enterprising Nation: Renewing Australia’s Managers to Meet the Challenges of the Asia-Pacific Century – was published. When released, the landmark report provided new insights into the way Australia trained its workforce for management and leadership roles. Its findings focused on the need for strong enterprise culture, support for the development of the management skills of SME owners, and the importance of a commitment to globalisation, diversity and enterprise and education institution best practice. Taskforce Chair David Karpin emphasised the importance of recognising that strong leaders and managers required well-structured, systematic education and continuing professional development to add the greatest value to the national economy through their performance at enterprise level.
Since the Karpin Report, the global and domestic business contexts have changed profoundly with increasing globalisation, new business models, Australia having well and truly entered the “Asian century”, digital disruption across almost every sphere of business, the end of the mining boom bringing with it a need to transition from a resources to service-based economy and the critical need to drive greater levels of business innovation.
In spite of the profound changes to the business environment, the need for the training and education to ensure managers and leaders add maximum value to the national economy through their performance at the enterprise has remained.
Not coincidentally, over the last two decades, the growth of the flexible workforce has become the number one trend in the employment landscape in Australia. Many businesses have responded to major challenges by seeking to drive profit and/or efficiencies through temporary working arrangements including:
- greater use of short and long-term employment contracts including casual employees;
- the engagement of independent contractors;
- supplementing basic headcount with labour hire arrangements including outsourcing/contracting out specific core and non-core business functions; and
- the use of technology as a platform for providing “on-demand” services (such as Uber and Deliveroo) that redefine or subvert traditional employer/employee relationships.
Around 1 in 4 workers are now reported to be in non-standard work arrangements – employment arrangements that do not involve full-time permanent wage and salary jobs including casual employees, fixed-term employees, labour hire workers, self-employed contractors and independent crowdwork via the Internet.
Business groups have also welcomed the recent cuts to penalty rates in the hospitality, retail, fast food and pharmacy sectors. It remains unclear how the cuts will actually contribute to improving productivity and job creation. What should be crystal clear is that cutting wages might increase profits but it doesn’t actually increase labour productivity. Improving management capability alongside technological innovation on the other hand, is irrefutably an effective lever in productivity improvement.
So where should the focus really be?
- Industry policy – investing in the effective deployment of technological innovation and leadership and management capability should be a policy focus – these are “vital and undervalued lever[s] of Australia’s productivity performance” (Steve Vamos, Leadership, Culture and Management Practices of High-Performing Workplaces in Australia, 2011);
- Organisational investment in leadership and management skills – leadership and management skills will be crucial to meeting the challenges of improving Australia’s productivity, innovation capability and competitiveness at the enterprise level over the coming decade. Business investment in developing the leadership and management skills of its people will be central to improving productivity at the enterprise level and greater national economic prosperity.
- Greater collaboration between business and the research sector – encouraging greater engagement between the science and technology sectors, government and industry and stronger linkages between the academic and business worlds will be critical as part of a broader commitment to gaining greater commercial returns on publicly-funded research and encouraging technology-driven innovation.
- Technical capability at decision-maker/management and leadership levels – technology professionals in management and leadership roles who participate in well-structured, systematic education and continuing professional development are ideally positioned to drive increased staff engagement, workplace productivity and enterprise innovation, and
- Increased representation of women in management and leadership roles – the challenges we face as a nation are diverse and complex. Driving real productivity improvement will require a diverse range of leaders and managers. It’s not that men and women manage or lead differently – rather, a diverse management and leadership team brings together a range of people who think differently and approach problems in different ways – and this can generate a range of benefits including a positive impact on the bottom line. As well as addressing a core justice and equity issue, the payoff is a better bottom line for enterprises and improvements to workplace productivity and Australia’s economic performance.
Professionals Australia is committed to advocating in these areas, to helping members develop their management and leadership skills and to ensuring professionals in management and leadership roles play the critical role they should in contributing to their organisation’s bottom line and national economic prosperity. Developing and embedding modern workplace practices requires a recognition by business that their people are the key to future growth and innovation rather than a cost to be cut – that their people are not part of the problem but part of the solution.
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